The Finance Bill 2022 proposes strict measures to increase the tax base and penalize non-compliant persons. These measures include penalties for non-filing of income tax returns, non-issuance of sales tax invoice numbers or QR codes, and non-generation of fiscal invoices. These penalties are aimed at encouraging compliance with tax laws and regulations in Pakistan.
Penalty for Non-Filing of Income Tax Return
Under section 182 of the Finance Bill 2022, the penalty for non-filing or late filing of income tax returns has been increased.
The penalty will be charged as follows:
- Higher of 0.1% of the tax payable for each day of default or Rs. 1,000 per day
- Maximum 200% of tax payable
- Minimum Rs. 10,000 if 75% or more is salary income and Rs. 50,000 in other cases
This penalty is aimed at ensuring that individuals and businesses file their income tax returns on time and pay their due taxes.
Penalty for Non-Issuance of Sales Tax Invoice Number or QR Code
The Finance Bill 2022 also proposes penalties for persons who are integrated with the Federal Board of Revenue (FBR) system but avoid monitoring, tracking, reporting, or recording of sales, services, and related business transactions with the Board or computerized system. If such persons fail to register their transactions under the ordinance or fail to integrate in the prescribed manner, they shall be charged a fine of:
- Fine up to Rs. 1,000,000
- If the offence continues, the office/business premises can be sealed.
This penalty is aimed at ensuring that all sales and services are properly documented and recorded in the FBR system to prevent tax evasion.
Penalty for Non-Generation of Fiscal Invoice
The Finance Bill 2022 also proposes a specific penalty for persons who are required to integrate their business as per section 237A of the ordinance but fail to do so. These persons shall be liable to a penalty of:
- Rs. 500,000 for the first default provided it will be waived if non-compliance is rectified within fifteen days of such default,
- Rs. 1,000,000 for the second default
- Rs. 2,000,000 for the third default
- Rs. 3,000,000 for the fourth default
- Business premises will be sealed after fifteen days of the fourth default
This penalty is aimed at ensuring that all fiscal invoices are properly generated and recorded in the FBR system to prevent tax evasion.
Conclusion
The Finance Bill 2022 proposes strict measures to increase tax compliance in Pakistan. These measures include penalties for non-filing of income tax returns, non-issuance of sales tax invoice numbers or QR codes, and non-generation of fiscal invoices. These penalties are aimed at encouraging individuals and businesses to comply with tax laws and regulations and contribute to the development of the country. It is important for all taxpayers to understand and comply with these measures to avoid penalties and legal issues.
